Motivations for starting a business are widespread. Some of the most popular reasons entrepreneurs buckle down and start a business are to gain financial freedom, to be their own boss, and simply because the culture of business ownership seems far superior to “working for the man”. Whatever your reasons for starting a business, there are steps to follow before you can open the doors to a booming business.
A business plan is the first step to starting a business. This document should be extensive. It cannot be thrown together in an afternoon. Most people think of a business plan as something to show potential investors or lenders. However, a good business plan can be used like a map during a business’s first years of operation. The writing process offers an excellent time for you to determine the feasibility of your business idea, the strengths and weaknesses of your business, areas of opportunity, and much more. The keys to a good business plan include:
Required sections of a business plan include:
After you have written a business plan, you will have a good idea of how much money you need to get your business up and running. Startup costs vary greatly between industries. Some technology companies can start with just a few hundred dollars, while a business such as a small bakery or coffee shop will cost at least $100,000-$200,000. There are a few different ways to fund a new business:
Other business structures include S corporations, nonprofit corporations, and more. Each has their own unique advantages and disad
vantages, specifically when it comes to paying taxes, liability, and investment options. Once the most appropriate structure has been selected, you may need to apply for a tax identification number for your business.
Although many people starting a small business are strapped for cash, spending a little money on a business lawyer can save big bucks in the long run. Setting up a business structure, renting retail space, hiring employees, purchasing business equipment, and more are all decisions with serious legal implications. Most small businesses will not require a lawyer on retainer at all times, but hiring a lawyer to help with startup legal issues is a good idea to get off on the right foot.
The legal documents, licenses, and permits will vary depending on what type of business you open, but every startup will require some kind of paperwork. Common business licenses and permits which startups require include:
Most of these application forms are state and county specific, depending on where your business will be operating.
Nolo – Nolo offers a comprehensive collection of resources, articles, and books on business law.
Entrepreneur Startup – News, practical guides, business planning resources, and much more from the trusted magazine and website Entrepreneur.
Small Business Administration – SBA is the ultimate resource for advice on starting a business. They cover topics from law, to loans, and beyond.
Business Plans – Excellent examples of business plans for startups in a wide range of industries.
Business IRS – The best place for documents and requirements for paying business taxes.